Insights

An update on the regulations for the Design & Building Practitioners Act 2020 (NSW)

Insurance Law & Litigation

Much of the detail of the new reforms introduced by the Design & Building Practitioners Act 2020 (DBP Act) has been left to the regulations, which are yet to be released and are now not expected until early next year.

The government has, however, given some indication of what it is thinking during its consultation with construction and insurance industry bodies and groups for the purposes of drafting the regulations.

What class of building?

Despite previously suggesting that the new statutory duty of care introduced by the DBP Act would initially apply to a range of building classes including 1, 2, 3 and 10, it seems this may no longer be the case. The focus of all of the reforms introduced by the DBP Act (including the duty of care) will now apparently be limited to only class 2 or mixed-use buildings with a class 2 component, at least initially.

Contract sum

It has been proposed that the reforms apply to any "building work" (as defined in the Act) that exceeds $5,000, and it does not look like the regulations will add anything further to the current definition of "building elements" in the DBP Act.

Categories of design practitioner

It is envisaged that the category of "design practitioner" will be broken down into 10 different sub-categories, including:

  • architectural
  • building design
  • structural engineering
  • façade engineering
  • mechanical engineering
  • fire safety engineering
  • fire systems design engineering
  • electrical engineering
  • hydraulic engineering, and
  • geotechnical engineering.

Design practitioners will be required to register in the applicable sub-category, while there will be only one category of registration for "building practitioners".

Qualifications and experience

Building practitioners will be entitled to registration if they hold a licence under the Home Building Act, while the registration requirements for design practitioners are still being refined. It has been suggested that a design practitioner may have to have five years' experience and that an architect may have to hold a masters degree to be registered. This, however, has not been confirmed and the recognition of existing registration/licensing of design practitioners is also being considered.

It is anticipated that not every single practitioner working on a project will need to be registered (and therefore insured – see below), as it is only the single practitioner responsible for issuing the compliance declaration (and not the various practitioners that may work under his/her supervision) that needs to be registered.

A code of conduct?

There has been some discussion around the introduction of a code of conduct to cover design practitioners, principal design practitioners and building practitioners. This will no doubt shed further detail on the specific requirements of each of these practitioners under the new reforms, which all affected practitioners are waiting for.

Mandatory insurance

The government has reportedly started consultation with the insurance industry and there are currently a number of different avenues being considered with respect to the mandatory insurance required to be held by all registered practitioners. One of these options is the requirement for a practitioner to hold a professional indemnity policy with specified policy conditions, such as a maximum limit. Another option currently being explored is the potential for a design practitioner to obtain insurance by being a member of a professional body that operates within a professional standard scheme.

Commentary

The fact that the DBP Act is likely to apply to a restricted class of building is to be welcomed.

Despite insurers acknowledging the potential for the DBP Act reforms to help decrease claims in the long term, following the flurry of concern caused by the retrospective application of the statutory duty of care, at least one professional indemnity insurer has reportedly stopped writing risk in the residential space.

It is possible that there will be premium increases to account for the perception of an increased risk profile of those involved in projects caught by the scope of the DBP Act.

More to come once the regulations are to hand...

All information on this site is of a general nature only and is not intended to be relied upon as, nor to be a substitute for, specific legal professional advice. No responsibility for the loss occasioned to any person acting on or refraining from action as a result of any material published can be accepted.

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Contacts

Elizabeth Berwick

Elizabeth Berwick

Lawyer